A P Moller-Maersk and Royal P & O Nedlloyd N.V. (48/LM/May05) [2006] ZACT 39; [2006] 2 CPLR 577 (CT) (12 May 2006)

A P Moller-Maersk and Royal P & O Nedlloyd N.V. (48/LM/May05) [2006] ZACT 39; [2006] 2 CPLR 577 (CT) (12 May 2006)

The Tribunal found that the only product overlap between the merging parties was in containerised shipping services. The Commission's investigation revealed high combined market shares on certain trade routes, but also found evidence of competition and new entrants on other routes. The adoption of the European Commission's conditions, including divestiture and withdrawal from certain consortia, was deemed sufficient to address competition concerns in South Africa. The Tribunal also imposed a condition prohibiting retrenchment of unskilled workers for twelve months post-merger to address public interest concerns regarding employment. The merger was conditionally approved as the imposed...

Citation
[2006] ZACT 39
Parties
Applicant: A P Moller-Maersk; Respondent: Royal P & O Nedlloyd N.V.
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
12 May 2006
Case Number
48/LM/May05
Procedural Posture
Large Merger / Approval
Outcome
The merger is conditionally approved subject to the imposed remedies and employment protections.
Judges
N Manoim, D Lewis, Y Carrim
Legal Topics
Large Merger Review, Market Definition, Remedies and Conditions, Public Interest, Employment Loss
Competition Law Commercial and Corporate Large Merger Review Market Definition Remedies and Conditions Public Interest Employment Loss

Case Brief

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Parties

A P Moller-Maersk

Applicant

Royal P & O Nedlloyd N.V.

Respondent

Procedural Posture

Large Merger / Approval

Legal Issues

  1. 1 Whether the proposed merger would result in a substantial prevention or lessening of competition in the relevant container shipping markets.
  2. 2 Whether the conditions adopted from the European Commission adequately address competition concerns in South Africa.
  3. 3 Whether the merger would have a significant negative impact on employment, particularly for unskilled workers.

Ratio Decidendi

The Tribunal found that the only product overlap between the merging parties was in containerised shipping services. The Commission's investigation revealed high combined market shares on certain trade routes, but also found evidence of competition and new entrants on other routes. The adoption of the European Commission's conditions, including divestiture and withdrawal from certain consortia, was deemed sufficient to address competition concerns in South Africa. The Tribunal also imposed a condition prohibiting retrenchment of unskilled workers for twelve months post-merger to address public interest concerns regarding employment. The merger was conditionally approved as the imposed...

Court Disposition

The merger is conditionally approved subject to the imposed remedies and employment protections.

Orders

  • The merger between A P Moller-Maersk and Royal P & O Nedlloyd N.V. is approved subject to the conditions adopted from the European Commission.
  • A P Moller-Maersk must divest the business of PONL on the trade between Europe and South Africa.